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The deserving rich v the undeserving poor

By Jane Caro - posted Monday, 16 August 2010

This deeply uninspiring election campaign has seen both leaders try to out-do one another as fiscal conservatives. Despite the appearance of flinging money around, most commentators agree that the two sides are being relatively penny-pinching - for an election campaign anyway.

The Coalition, in particular, have been fulminating about “waste”, keen to land blows on the ALP over the “failed” BER, the pink batts debacle, and the horror of borrowing $100 million a day to service our (actually fairly miniscule) debt “crisis”. Abbott is claiming to be so careful with taxpayer’s money he has even foreshadowed extending the quarantining of welfare payments to all the long term unemployed across Australia, so that half their money can only be used to purchase food, clothing and other necessities. He has justified this by declaring that taxpayers have a right to know where their money is going.

Yet it never ceases to amaze me how selective both parties are about just what constitutes wasting public money in today’s Australia. But, to be fair, it seems most of us are half blind in much the same way.


We watch what people at the lower end of society do with their welfare payments like hawks. Pouncing on any evidence of misuse with cries of “dole bludgers” and “welfare cheats”. Our view appears to be that you can’t trust the poor an inch when it comes to giving them money. Indeed, so punitive were the Howard government’s attitudes to single mothers - ending all supporting parent benefits when the child turned six - that these women are credited with helping defeat Howard in 2007 and in chasing former Community Services Minister Mal Brough from his seat. You can understand their frustration and anger when you consider the tax incentives the Howard government also used to encourage mothers in two-parent families to stay home and care for their children, no matter what the child’s age.

It seems we are witnessing a fundamental change in the way we distribute public funding. When it comes to middle class welfare, both sides of politics are falling over themselves in their haste to throw more and more money at those who are already doing fairly nicely, thank you very much. Public investment in social services has become a way for governments to reward and punish certain groups.

Just look at the way politicians use the tax system to fund schools. If we want to talk about wasting taxpayer’s money, the discredited SES funding system for private schools would appear to me to be the prime example of chucking big money about carelessly.

More than half of Australia’s private schools now receive more public funding than they are entitled to according to their SES ranking, thanks to the politically expedient funding maintained and funding guaranteed sweetheart deals done between the powerful private school lobby groups and successive governments. Despite instituting the first review into schools funding for decades, Gillard has promised she will not reconsider SES funding until 2013, no matter what the review recommends. Abbott has said he will maintain the SES funding as it is in perpetuity.

Just imagine the outcry if we discovered that more than half of Australia’s unemployed, single mothers or old aged pensioners were receiving more than they were entitled to from the taxpayer? You can already hear the shock jocks shrieking from their bully-pulpits. Yet we do not hear a peep from anyone about excessive government subsidies to schools that can afford to buy White City, build under-ground carparks, multi-purpose media centres and professional-standard sporting facilities.

Indeed, if anyone does have the temerity to complain, they are howled down with cries about the “politics of envy” and the handful of Indigenous scholarship kids (subsidised by a quick $20 million from the taxpayer via Kevin Rudd) are trotted out to demonstrate elite schools’ earnest commitment to social justice. Now Abbott is promising to give a small number of kids with a disability $20,000 vouchers to attend these schools. How come no one has asked why these unbelievably wealthy schools, especially the ones being over-paid, can’t divert a little of the public subsidy they already receive to support such students?


Unlike the recipients of real welfare, who are policed within an inch of their lives, there is little accountability for the millions handed out to these schools. Justified as supporting parental choice, there is actually no mechanism attached to these subsidies to make sure that they have any effect on the fees parents pay at all. Indeed, the fees of most private schools rise every year, often at a much greater rate than inflation.

In fact, as we have seen with the healthcare rebate, the childcare rebate and the first home-buyer’s scheme - and as economists have said about Tony Abbott’s promise to rebate a percentage of school fees - public subsidy of private provision is largely inflationary. The market will charge what the market will bear, so the private provider - quite sensibly - simply ups the fees by the amount of the subsidy, providing a windfall for them and no relief for parents. A waste of taxpayers’ money, in anyone’s language.

According to the sweetheart SES deals, the public funding to many private schools can only go up, never down. For example, if a school once had a few kids from rural and remote areas, their SES funding went up and then stayed up, even after the kids were long gone. The equivalent, perhaps, to someone who received benefits when unemployed continuing to receive them long after they have got a job. We actually prosecute people who attempt to do that, I believe.

If we are serious about not wasting public money, we simply must put a stop to it at the top end of the income scale as well as at the bottom. And until politicians come to terms with the fact that they are wasting money on a grand scale through the corrupted SES funding scheme, and, by doing so, stopping schools that service the most disadvantaged kids in the community from putting that money to much better use, everything else - uniform rebates, national curriculum, performance pay for teachers, cash for high performing schools, more chaplains, and so on - is just fiddling round the edges.

We must re-distribute our precious education funding to the students who really need it and the schools that will not waste it. School funding should not be about rewarding “good” parents and punishing “bad” ones. School funding should deliver opportunities for children, regardless of who their parents are.

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About the Author

Jane Caro is a Sydney writer with particular interests in women, families and education. She is the convenor of Priority Public. Jane Caro is the co author with Chris Bonnor of The Stupid Country: How Australia is Dismantling Public Education, published in August 2007 by UNSW Press.

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